TO: | Honorable Jim Keffer, Chair, House Committee on Ways & Means |
FROM: | John S. O'Brien, Deputy Director, Legislative Budget Board |
IN RE: | HB3282 by McCall (Relating to a tax credit for donations of money or art to art museums, galleries, or collections that are open to the public.), Committee Report 1st House, Substituted |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2006 | $0 |
2007 | ($11,800,000) |
2008 | ($11,800,000) |
2009 | ($11,800,000) |
2010 | ($11,800,000) |
Fiscal Year | Probable Revenue Gain/(Loss) from GENERAL REVENUE FUND 1 |
---|---|
2006 | $0 |
2007 | ($11,800,000) |
2008 | ($11,800,000) |
2009 | ($11,800,000) |
2010 | ($11,800,000) |
The bill would allow a corporation that donated works of arts to a Texas museum open to the public and desirous of taking the works into its permanent collection to take a Texas franchise tax credit equal to the total appraised value of the works. The credit claimed could not exceed the amount of tax due, before other any other applicable credits, nor could the credit be carried-forward to be used against future liability.
The effective date of the bill would be January 1, 2006.
The bill is assumed to affect Texas franchise tax collections in fiscal year 2007.
The latest available Internal Revenue Service data (tax year 2001) indicates that U.S. corporations claimed total charitable contributions of $15.753 billion. This total would include monetary and non-monetary contributions of many types: medical research, education, art, etc.
To estimate the fiscal impact of this bill, the Texas corporate contributions in 2001 were assumed to be equal to the ratio of estimated Texas gross state product to the U.S. gross domestic product, or 7.5 percent, an estimated amount of $1.181 billion.
An assumption that one percent of the $1.181 billion Texas charitable contributions being works of art would result in estimated annual franchise tax credits and annual losses to General Revenue amounting to $11.8 million.
Source Agencies: | 304 Comptroller of Public Accounts
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LBB Staff: | JOB, SD, WP, CT
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